Published Tuesday, August 29, 2000, in the San Jose Mercury News

Bechtel to "earthquake-proof"
Bay Area water system --
project to cost $3.5 Billion

BY MIKE ZAPLER
Mercury News

The San Francisco Board of Supervisors on Monday authorized a multimillion-dollar payment to engineering giant Bechtel to manage the overhaul of a water system that serves 2.4 million Bay Area residents.

The 10-1 vote is an initial step toward a planned $3.5 billion renovation of the Hetch Hetchy water system, built in the 1920s, and a century-old network of pipelines, dams and other facilities owned by the city's Public Utilities Commission. By comparison, the proposed expansion of San Francisco International Airport is expected to cost about $2.5 billion.

The aging water system, which some engineers say could be disabled by a major earthquake, serves people in San Francisco and in San Mateo, Santa Clara and Alameda counties.

Lawrence Klein, the utilities commission's assistant general manager, said in the worst case, a temblor could leave people without drinking water for two to three months.

``You would have to have emergency supplies until pipes were restored,'' he said. ``That's clearly an unacceptable risk for an economy of this size.''

The four-year, $45 million management contract was awarded to the San Francisco Water Alliance, a coalition of companies led by Bechtel. It is the largest public works management contract ever awarded by the city utilities commission.

The pact has been delayed by more than two years of political wrangling, with companies lobbying for the work and unions arguing that city employees could manage the project themselves. David Novogrodsky, executive director of the International Federation of Professional and Technical Engineers, said last week that the contract appears to be the first step toward privatization of the city's water system -- a charge Klein denied.

Board of supervisors President Tom Ammiano cast the lone ``no'' vote. Agreeing with a recent report by city budget analyst Harvey Rose, Ammiano doubted the figure of $138 million city officials have estimated they can save by hiring Bechtel.

``The cost savings,'' he said, ``are a guessing game at best.''

He also questioned whether the utilities commission should wait until it has a new general manager before approving such a major contract. That job has been vacant since early this year.

The utilities commission currently has only about $500 million in its budget for the renovation project. It plans to seek a voter bond next year to finance the remaining costs, which could be as much as $3 billion.